(a) On I January 20X7 Parent Ltd acquired all the ordinary shares in Daughter Ltd for £16,200 cash. The fair value of the net assets in Daughter Ltd was £ 12,000.

(b) The purchase consideration was satisfied by the issue of 5,400 new ordinary shares in Parent Ltd. The fair value of a £1 ordinary share in Parent Ltd was £3. The fair value of the net assets in Daughter Ltd was £ 12,000.

Required in each case:
Prepare the statements of financial position of Parent Ltd and the consolidated statement of finan¬ cial position as at I January 20X7 after each transaction, using for each question the statements of financial position of Parent Ltd and Daughter Ltd as at I January 20X7 which were as follows:

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Parent Ltd Daughter Ltd E Ordinary shares of 1 each 40,500 9,000 Retained earnings 4,500 1,800 45,000 10,800 Cash 20,000 2,000 Other net assets 25,000 8,800 45,000 10,800